Michael Page cuts headcount as profit sinks

Michael Bow is a reporter at City A.M. covering private equity, funds, investments and asset managers. He can be reached on michael.bow@cityam.com

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Michael Bow

RECRUITER Michael Page International saw its share price yo-yo yesterday as investors reacted to its second profit warning this year amid mounting third quarter losses for its core businesses in UK and Europe.

Shares climbed back four per cent during the day to close at 363p having plunged in opening trading from 368p to 348p – despite the recruiter admitting full year operating profit would fail to meet the £67.7m forecast by analysts.

Yesterday, the white collar recruiter, which places people in professional services jobs, reported an 11 per cent year on year fall in third quarter profits down to £126.5m versus £142.7m on the back of a poor Eurozone performance.

Profits fell across the European region, with Italy and Spain both down 22 per cent compared to a year ago. The UK, which accounts for 23 per cent of its profits, saw a 10.9 per cent fall year on year. Germany proved most resilient, with profits falling by just six per cent. The firm’s main source of placements, finance and accounting, saw a 16.8 per cent fall.

The £1.1bn company said the number of people it employed had started to fall, a potential avenue to help offset the losses. “It remains key for us to manage our cost base, principally headcount, to reflect market conditions,” chief executive Steve Ingham said.

Smaller rival Robert Walters last week posted a one per cent increase in gross profit in the third quarter.